Zero Sum Games
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What I suppose you mean is whether the zero sum status stays always. Not really. For instance, I would excercise the option I bought only if I am going to profit. But the short or long position of the the person who has sold the option does not is taken at the time you bought the option. Probably he is actually making profit when you are excercising the option (which is when he is suppose to loose). Its a game dependent on the time its played and the all parameters (value of shares / options) at that point will always be zero sum. what I have written may be confusing or might not make sense, but in short the answer is the whole game of F&O in totality is not truely zero sum.
|05/27/2004 09:37 AM by Vihang; zero sum game|
Ex post, in monetary terms, when the option is exercised, what one partner gains is what the other partner loses. In economics, however, we know that two partners agree to a transaction because both, at least ex ante, expect to obtain [View full text and thread]
Can anybody let me know if there is a view among "Game Theorists" as to whether trading in futures and options contracts on exchanges such as CBOT, LIFFE and CME is a zero-sum game? I am trying to get my head round the concept, and [View full text and thread]
|01/31/2001 07:25 AM by DAVID RYNN; FUTURES AND OPTIONS MARKETS|